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Markets & Economy

The Economy: December 2016

THE ECONOMY: As of December 2016

Despite an unfavorable start to the year, stock markets finished 2016 on a high note. The post-election stock rally continued through December, bringing the yearly return of the S&P 500 to 11.96 percent, up substantially from its low point in early February. Small cap equities fared even better, with an impressive 26.56 percent increase. International markets weren’t as robust as domestic ones, but the international and emerging markets gained 1 percent and 11.19 percent, respectively, for the year. Rising interest rates in December depressed fixed income returns, but will provide higher income going forward. In 2017, policies from both the government and the Federal Reserve are set to change course, which investors will need to monitor closely going forward.